The Cannon Group, Inc. was an American group of companies, including Cannon Films, which produced a distinctive line of low- to medium-budget films[2] from 1967 to 1994.[3] The extensive group also owned, amongst others, a large international cinema chain and a video film company that invested heavily in the video market, buying the international video rights to several classic film libraries.

History

1967–1979: Beginnings

Cannon Films was incorporated on October 23, 1967. It was formed by Dennis Friedland and Chris Dewey while they were in their early 20s. They had immediate success producing English-language versions of Swedish soft porn films directed by Joseph W. Sarno: Inga (1968), aka Jag - en oskuld and To Ingrid, My Love, Lisa (1968), aka Kvinnolek. By 1970, they had produced films on a larger production scale than a lot of major distributors, such as Joe, starring Peter Boyle. They managed this by tightly limiting their budgets to $300,000 per picture—or less, in some cases. However, as the 1970s moved on, a string of unsuccessful movies seriously drained Cannon’s capital. This, along with changes to film-production tax laws, led to a drop in Cannon's stock price.

1979–1985: Golan-Globus era

By 1979, Cannon had hit serious financial difficulties, and Friedland and Dewey sold Cannon to Israeli cousins Menahem Golan (who had directed The Apple) and Yoram Globus for $500,000.[4] The two cousins forged a business model of buying bottom-barrel scripts and putting them into production.

During these years, Cannon worked with entertainment-advertising company Design Projects, Inc. for most of the one-sheet posters, trade advertising, and large billboards prominently displayed at the Cannes Film Festival each year. Substantial pre-sales of the next years' films were made based on the strong salesmanship skills of Globus, and the advertising created by Design Projects. The deposits made from these sales financed production of the first film in the production line-up, which—when completed and delivered to theatre owners around the world—generated enough money to make the next film in the line-up. Slavenburg's bank [nl] in the Netherlands (which had provided Cannon's start-up capital in 1979) provided bridge financing until the pre-sales amounts were collected.[11]

The bank was central in the Slavenburg affair, a famous case of company fraud begun in 1983 and ending in 1990 with the conviction of four members of the management team. Slavenburg's bank was discovered to be regularly laundering the profits of organised crime, drugs, sex clubs and the underworld, as well as being complicit in financial fraud committed by private individuals.[12] Slavenburg's was bought in 1983 by Crédit Lyonnais.

1986–1989: Later years

By 1986, output reached an apex with 43 films in one year. Golan remained Chairman of the Board, while Globus served as President.

During this year, Cannon Films released Robotech: The Movie (also called Robotech: The Untold Story) for a limited run in Mesquite, Texas, a suburb of Dallas. Cannon was reportedly unsatisfied with Carl Macek’s first version of the movie, which was almost a straight adaptation of the anime Megazone 23. It was at their insistence that footage from The Super Dimension Cavalry Southern Cross (the series adapted as the Robotech Masters segment of the Robotech TV series) and Megazone 23 be spliced together to produce a more action-oriented movie. Macek recalls that although he was unhappy with this revised version, Menahem Golan, after viewing it, happily said: "Now that’s a Cannon movie!"[citation needed] Nevertheless, Robotech: The Movie was unsuccessful in its brief Texas run and saw no further release. Carl Macek has gone on record as disowning it.[citation needed]

Golan and Cannon Films were famous for making huge announcements and over-promoting movies that did not live up to expectations—or even exist. For instance, Lifeforce (1985) was to be "the cinematic sci-fi event of the '80s" and Masters of the Universe (1987) was dubbed "the Star Wars of the '80s."

Spider-Man

Additionally, Cannon owned the film rights to Spider-Man, and planned to make a Spider-Man movie in the mid-1980s.[17]
Golan and Globus agreed to pay Marvel Comics $225,000 over the five-year option period, plus a percentage of the film’s revenues.[17] The rights would revert to Marvel if a film was not made by April 1990.[18] Marvel and Columbia would eventually complete a film several years later for director Sam Raimi, after the rights had been resecured.

Pathé ownership and popularity in the UK

In May 1987, The Cannon Group sold its 2,000-title British film library,[19] the Thorn-EMI Screen Entertainment Library, for $85-million to Weintraub Entertainment Group.[20] Also, the same year Cannon drop out the HBO/Cannon Video which became HBO Video.

By 1988, a cooling of the film market and a series of box office flops—including the multimillion-dollar production of Superman IV: The Quest for Peace (1987), whose original $36-million budget was slashed to $17 million—had once again put Cannon in financial woes. The company signed an agreement with Warner Bros. to handle part of their assets; however, the financial loss was staggering. Having purchased Thorn EMI's Thorn EMI Screen Entertainment division in 1986,[16] Cannon Films was severely stretched, and faced bankruptcy. The U.S. Securities and Exchange Commission began an investigation into Cannon's financial reports, suspecting that Cannon had fraudulently misstated them.

On the verge of failure, Cannon Films was taken over by Pathé Communications, a holding company controlled by Italian financier Giancarlo Parretti. Financed by the French bank Crédit Lyonnais, Pathé Communications' takeover of Cannon immediately began a corporate restructuring and refinancing of $250 million to pay off Cannon's debt. By 1989, Golan, citing differences with both Parretti and Globus, resigned from his position and left Cannon to start 21st Century Film Corporation, while Globus remained with Pathé.

One of the final movies produced by Golan and Globus that received a wide release under the Cannon Films banner was the Jean-Claude Van Damme post-apocalyptic action film Cyborg. This film was conceived to use both the costumes and sets built for an intended sequel to Masters of the Universe and the ill-fated live-action version of Spider-Man. Both projects were planned to shoot simultaneously under the direction of Albert Pyun. After Cannon Films had to cancel deals with both Mattel and Marvel Entertainment Group because of their financial troubles, they needed to recoup the money spent on both projects.

As part of his severance package from Pathé, Golan took the rights to Marvel’s characters Spider-Man and Captain America (Golan was able to put Captain America into production, and released it directly to video through his 21st Century Film Corporation, while, as aforementioned, Columbia would eventually take Spider-Man to production for 2002 release). Not to let that pre-production work go to waste, Pyun wrote Cyborg, with Chuck Norris in mind, suggesting it to Cannon Films. Jean-Claude Van Damme was cast in the lead role. Some television stations still give the film’s title as Masters of the Universe 2: Cyborg.

Cannon's films proved to be much more popular in the United Kingdom than in its native United States, which is why Cannon acquired several British cinema chains during the 1980s, and founded the mail-order video distribution service Videolog as a joint venture with Columbia House Europe, Ltd. in the mid-1980s. Cannon Cinemas were a familiar sight in the United Kingdom until the late 1990s, when MGM Cannon cinemas were sold to Virgin who retained the multi screen sites and sold the traditional sites to a new ABC Cinemas.

1990–1994: Relaunch and demise

Following Golan's departure from Cannon Films, he became the head of 21st Century Film Corporation. Globus continued working with Parretti at Pathé.

When Pathé took over control of Metro-Goldwyn-Mayer in 1990 as part of the MGM-Pathé merger, a majority of the Cannon Films library became part of the MGM library (certain rights for other media and select films during the Thorn EMI merger now lie with other entities). During Parretti's tenure at MGM and Warner Bros., he appointed Globus as president of the studio for a brief period of time.

In 1990, Parretti reorganized Cannon Pictures, Inc. as the low-budget distribution arm of Pathé. Veteran Italian film producer Ovidio G. Assonitis served as Chairman and CEO of the new Cannon Pictures from 1990 to 1991. After the MGM-Pathe merger, Cannon Pictures spun off from Pathé, and was later run by former Cannon Group production head Christopher Pearce, who served as Chairman and CEO from 1991 to 1994. Cannon Pictures continued to release films, including A Man Called Sarge, American Ninja 4: The Annihilation and No Place to Hide.

Parretti was pushed out of management control of Metro-Goldwyn-Mayer in 1991 by Crédit Lyonnais, after he defaulted on loan payments.[21] Parretti was later convicted of perjury and evidence tampering in a Delaware court for statements he made in a 1991 civil case, brought by Credit Lyonnais to validate their removal of Parretti, to the effect that a document he claimed allowed him to retain control of MGM was authentic;[22][23] he fled the country for Italy before he could be sentenced or extradited to France, where he was wanted on criminal charges related to his use of MGM's French assets.[23][24]

In 1997, the California Superior Court in Los Angeles entered a final judgement in a separate civil suit against Parretti, ordering him to pay $1.48 billion to Credit Lyonnais.[23] After Federal prosecutors unsealed an indictment against Parretti and Florio Fiorini accusing them of fraud in 1999, Italian authorities arrested both men and held them for extradition to the United States.[25] Parretti was released by the court of appeal in Perugia shortly thereafter, ordered to remain in his home town of Orvieto and report to the police three times a week, even though authorities in Rome had requested he be held pending a decision on the extradition.[26]

Post-Cannon

Golan continued to produce and direct films until his death on August 8, 2014. Globus is the president of Globus Max, which has interests in film production and distribution and runs a 140-screen cinema chain in Israel.[citation needed][27]

The Cannon Group's library is, for the most part, currently owned by Metro-Goldwyn-Mayer (for the pre-Thorn EMI era library) and Warner Bros. (for films that Cannon Films still owns in-name-only), while North American television rights are now owned by Paramount Television, successor to parent company Viacom's syndication unit.[30]